Man Group, the world’s largest listed hedge fund business, reported funds under management fell from $57 billion to $54.8 billion for the first quarter.

Net outflows for the quarter were $3.7 billion, comprising sales of $2.5 billion and negative redemptions of $6.2 billion.

The firm saw foreign exchange movements of negative $1.6 billion, driven by the strengthening of the US dollar against the yen, euro and sterling. Other movements of $0.3 billion were driven by guaranteed product regears of $0.5 billion and partially offset by institutional product maturities and other movements of $0.2 billion

The firm posted a positive investment movement of $2.8 billion for the first three months and guaranteed product funds under management increased by $0.3 billion to $6 billion.

Manny Roman, the chief executive of Man Group, said the firm plans to buy back stock in order to reduce its $920 million surplus in capital.

This will reduce surplus capital by up to $470 million to make pre-tax interest savings of $78 million, leaving it with $450 million by January 2014, the firm said in a statement.

The repurchasing of debt to reduce surplus capital follows changes in the firms regulatory status last month. For more on this story, click here.